The continued market growth for electric vehicles globally is accelerating the transformational shift to a low-carbon transportation future. However, the sustainability of this transition hinges to a large extent on the management of waste, including end-of-life batteries where strategic elements such as lithium (Li) and cobalt (Co) are present. Different from the existing pyrometallurgical and hydrometallurgical recycling methods that involve heavy energy inputs and the use of hazardous chemicals, here we show a feasible single-step process that not only reclaims lithium cobalt oxide (LiCoO₂) from waste Li-ion batteries but also upgrades it to a cathode with enhanced electrochemical properties. Our recycling process is based on a direct reaction between spent LiCoO₂ and added mixture of Al₂O₃, MgO and Li₂CO₃, during which the Li vacancies aid the diffusion of Al and Mg to yield dual-doped LiCoO₂. The upgraded LiCoO₂ cathode possesses even better structural stability and sustains 300 cycles retaining 79.7% of its initial capacity at a voltage of 4.6 V. As evidenced by the technoeconomic analysis, the current circularity approach exhibits cost benefits and could catalyse further progress in the upcycling of different materials for batteries.